A fake press release suggesting a Wi-Fi hotspot company was acquired by Google sent its stock soaring this morning, and offered a glimpse of the money that can be made when the rumor mill that drives the online economy meets the volatile market in penny stocks.

Early on Monday, a press release purportedly from ICOA Inc, a Wi-Fi hotspot company, was posted on PRNews.com. It made a surprising but nowadays common claim: “Google has announced its acquisition of ICOA Inc. A provider of Wi-Fi to high traffic public locations.”

It was a medium-sized deal by a company that often signs large checks without much fanfare, and it was in an area Google has shown interest in — the company has offered free Wi-Fi via hotspots in the past, and has become an actual ISP in Kansas City. It turns out, though, that none of it was true. Google sources denied the report to AllThingsD, but not before the story was published on most major tech blogs, including Techcrunch.

But the news wasn’t that ICOA has jumped the gun on closed-door negotiations — the deal didn’t exist.

ICOA CEO George Strouthopoulos suggested in a separate e-mail that the press release may have been part of a conspiracy to manipulate the company’s stock:

This was a Hoax. We are investigating the source, so far it originated from Aruba

This is NOT TRUE!! Never had any discussions with any potential acquirers!! This is absolutely false!

Someone, I guess a stock promoter with a dubious interest, is disseminating wrong, false and misleading info in the PR circles.
ICOA will report this to the proper authorities.

Emphasis mine.

His theory makes a lot of sense. The SEC has halted trading of ICOA’s stock — a penny stock, by the way, which was trading at just one cent this morning (Update: well below one cent, actually. Closer to 1/100th) — but before it did it went for a ride (ICOA is traded on a speculative market called OTC Pink):

ICOA climbed by hundreds of percent, which would have allowed an in-the-know investor — that is, a scammer — to run away with a huge profit. Judging by the massive bidding volume this morning, in the hundreds of millions of shares, it looks like someone was actively trying to game the stock. As rumors of the acquisition were still swirling, commenters on TheHotPennystocks message boards were skeptical:

-you guys better look at the bid side of ICOA 750 m

-ICOA the volume is ridic

-did I read that right? ICOA at 3 billion volume?!

-lol @ ICOA and fake news.. someone walked away with 1.6 million

If this was indeed stock manipulation, it is absolutely illegal. If was just a bizarre prank, which seems unlikely, it’s still illegal. Either way, it appears to be at least in part the fault of PRWeb.com, the typically credible press release clearing house that posted the original announcement.

PRWeb told BuzzFeed FWD it would respond later today to an inquiry about how the release wound up on its wire.

Update:

@jwherrman Re your ICOA piece. PRweb will publish anything if you just pay the fee. Source: I see promoters do it all the time

— HotStockMarket (@HotStockMarket)

@jwherrman Re your ICOA piece. PRweb will publish anything if you just pay the fee. Source: I see promoters do it all the time— HotStockMarket

PRWeb apparently has a reputation for allowing unconfirmed releases through.

Correction: The original article misstated the ICOA’s stock prices, and has been updated.